The British communications regulator Ofcom has published findings on the proposed Fox/Sky merger. It said in part:
We have concluded that the overall evidence available to date does not provide a reasonable basis for Ofcom to conclude that, if Sky were 100% owned and controlled by Fox, it would not be a fit and proper holder of broadcast licences. Our assessment finds that Sky would remain a fit and proper licence holder in the event of the merger.
As fitness and properness is an ongoing duty, we can re-examine our position if new evidence comes to light. Read the statement here.
Subsequently, The UK Secretary of State has said that, on the basis of Ofcom’s assessment, she is minded to refer to a Phase 2 investigation into the merger on the grounds of media plurality.
The Secretary of State added that the parties have until July 14 to make representations before she reaches a final decision.
21st Century Fox commented in a statement:
While we welcome the Secretary of State’s decision on broadcasting standards, we are disappointed that she does not accept Ofcom’s recommendation stated in its report that “…the proposed undertakings offered by Fox to maintain the editorial independence of Sky News mitigate the media plurality concerns”.
Separately, 21CF is pleased that Ofcom recognises that Sky, under full 21CF ownership, would remain a fit and proper holder of broadcast licenses.
Media reports about what this means for 21st Century Fox are mixed.
A news report in The Guardian:
Rupert Murdoch’s plans for the £11.7b takeover of Sky have been set back after the culture secretary accepted there were serious concerns over handing him and his family “increased influence over the UK news agenda and the political process”.
However, commentary from The Guardian’s financial editor Nils Pratley noted:
Rupert Murdoch will be smiling. A possible referral of the Sky bid to the competition authorities is a setback, but the overall plot is moving perfectly satisfactorily from his point of view. Soon he may be in the familiar position of haggling over fine details, such as the future of Sky News. In a negotiation with regulators and politicians, Murdoch usually finds a way to get a deal done.
The New York Times headline started: Major Setback for Murdoch in $15 Billion Sky Takeover.
By recommending that Britain’s competition authority carry out a further lengthy, and potentially intrusive, review over what impact the deal would have on Britain’s media landscape, the government has put increased pressure on Mr Murdoch and his family.